(b) any statement made by or on behalf of P,the court is satisfied that P would have been in contempt of court if the inquiry had been proceedings before the court, it may deal with P as if P were in contempt.Investigations 69 newlink j036Duty of FCA to investigate and report on possible regulatory failure (1) Subsection Single_Level_Xrefmf.630j-1113233: SubSection: (3) The FCA must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation.Yes 1327667809 356000(3) applies where it appears to the FCA that— (a) events have occurred in relation to a regulated person or collective investment scheme which— (i) indicated a significant failure to secure an appropriate degree of protection for consumers, (ii) had or could have had a significant adverse effect on the integrity of the UK financial system, as defined by section 1D of FSMA 2000 (the integrity objective), or (iii) had or could have had a significant adverse effect on effective competition in the interests of consumers in the markets for the services described in paragraphs (a) and (b) of section 1E(1) of FSMA 2000 (the competition objective), and (b) those events might not have occurred, or the failure or adverse effect might have been reduced, but for a serious failure in— (i) the system established by FSMA 2000 for the regulation of authorised persons and their activities, for the listing of securities or for the regulation of collective investment schemes, so far as it relates to the functions of the FCA, or (ii) the operation of that system, so far as it relates to those functions. (2) Subsection Single_Level_Xrefmf.630j-1113233: SubSection: (3) The FCA must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation.Yes 1327667809 356000(3) also applies where the Treasury direct the FCA that it appears to the Treasury that the conditions in subsection Single_Level_Xrefmf.630j-1112573: SubSection: (1) Subsection (3) applies where it appears to the FCA that\xd1 Yes 1327667809 356000(1) are met in relation to specified events. (3) The FCA must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation. (4) Subsection Single_Level_Xrefmf.630j-1113233: SubSection: (3) The FCA must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation.Yes 1327667809 356000(3) does not apply by virtue of subsection Single_Level_Xrefmf.630j-1112573: SubSection: (1) Subsection (3) applies where it appears to the FCA that\xd1 Yes 1327667809 371000(1) if the Treasury direct the FCA that it is not required to carry out an investigation into the events concerned. (5) “Regulated person” means— (a) an authorised person, (b) a recognised investment exchange, (c) any other person lawfully carrying on a regulated activity, (d) a person carrying on business in contravention of the general prohibition in section 19 of FSMA 2000, or (e) an issuer of listed securities. 70 newlink j035Duty of PRA to investigate and report on possible regulatory failure (1) Subsection Single_Level_Xrefmf.530j-1113233: SubSection: (4) The PRA must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation.Yes 1327667809 371000(4) applies where it appears to the PRA that—

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(a) relevant public expenditure has been incurred in respect of a PRA-authorised person, and (b) that expenditure might not have been incurred but for a serious failure in— (i) the system established by FSMA 2000 for the regulation of PRA-authorised persons and their activities, so far as it relates to the functions of the PRA, or (ii) the operation of that system, so far as it relates to those functions. (2) Subsection Single_Level_Xrefmf.530j-1113233: SubSection: (4) The PRA must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation.Yes 1327667809 371000(4) also applies where it appears to the PRA that— (a) events have occurred which— (i) had or could have had a significant adverse effect on the safety or soundness of one or more PRA-authorised persons, or (ii) if the effecting and carrying out of contracts of insurance is a PRA-regulated activity for the purposes of FSMA 2000, related to a PRA-authorised person carrying on that activity and indicated a significant failure to secure an appropriate degree of protection for policyholders, and (b) those events might not have occurred, or the adverse effect or failure might have been reduced, but for a serious failure in— (i) the system established by FSMA 2000 for the regulation of PRA-authorised persons and their activities, so far as it relates to the functions of the PRA, or (ii) the operation of that system, so far as it relates to those functions. (3) Subsection Single_Level_Xrefmf.530j-1113233: SubSection: (4) The PRA must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation.Yes 1327667809 371000(4) also applies where the Treasury direct the PRA that it appears to the Treasury— (a) that the conditions in subsection SubSection-Paramf.530j-1112589: Para: (a) relevant public expenditure has been incurred in respect of a PRA-regulated person, andYes 1327667809 371000(1)(a) and Single_Level_Xrefmf.530j-1112636: Para: (b) that expenditure might not have incurred but for a serious failure in\xd1 Yes 1327667809 371000(b) are met in relation to a specified person, or (b) that the conditions in subsection SubSection-Paramf.530j-1115272: Para: (a) events have occured in relation to a PRA-authorised person which\xd1 Yes 1327667809 371000(2)(a) and Single_Level_Xrefmf.530j-1115360: Para: (b) those events might not have occurred, or the extent of the adverse effect or failure might have been less, but for a serious failure in\xd1 Yes 1327667809 371000(b) are met in relation to specified events. (4) The PRA must— (a) carry out an investigation into— (i) the events that gave rise to the incurring of the public expenditure mentioned in subsection SubSection-Paramf.530j-1112589: Para: (a) relevant public expenditure has been incurred in respect of a PRA-regulated person, andYes 1327667809 371000(1)(a) and the circumstances surrounding them, or (ii) the events mentioned in subsection SubSection-Paramf.530j-1115272: Para: (a) events have occured in relation to a PRA-authorised person which\xd1 Yes 1327667809 371000(2)(a) and the circumstances surrounding them, and (b) report to the Treasury on the result of the investigation. (5) Subsection Single_Level_Xrefmf.530j-1113233: SubSection: (4) The PRA must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation.Yes 1327667809 371000(4) does not apply by virtue of subsection Single_Level_Xrefmf.530j-1112573: SubSection: (1) Subsection (4) applies where it appears to the PRA that\xd1 Yes 1327667809 371000(1) if the Treasury direct the PRA that it is not required to carry out an investigation into the events concerned. 71 newlink j038Interpretation of section gotolink j03570 (1) This section has effect for the interpretation of section gotolink j03570. (2) “Policyholder” has the same meaning as in FSMA 2000.

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(3) Relevant public expenditure has been incurred in respect of a PRA-authorised person (“P”) in each of the following cases (but no others)— (a) where the Treasury or the Secretary of State have provided financial assistance to or in respect of P for the purposes of resolving or reducing a threat to the stability of the UK financial system; (b) where the Treasury have incurred expenditure in connection with the exercise by the Treasury, the Secretary of State or the Bank of England of any power under Parts 1 to 3 of the Banking Act 2009 in relation to P; (c) where the scheme manager of the Financial Services Compensation Scheme has received a loan from the National Loans Fund, or financial assistance from the Treasury, for the purpose of funding expenses incurred or expected to be incurred under the Financial Services Compensation Scheme by reason of events relating to P. (4) In subsection SubSection-Paramf.830j-1115496: Para: (a) where the Treasury or the Secretary of State have provided financial assistance to or in respect of P for the purposes of resolving or reducing a threat to the stability of the UK financial system;Yes 1327667809 387000(3)(a) and Single_Level_Xrefmf.830j-1114634: Para: (c) where the scheme manager, as defined by section 212 of FSMA 2000, has received a loan from the National Loans Fund [or financial assistance from the Treasury] for the purpose of funding expenses incurred or expected to be incurred under the Financial SerYes 1327667809 387000(c) “financial assistance” includes giving guarantees or indemnities and any other kind of financial assistance (actual or contingent), but does not include the giving by the Treasury of an indemnity or guarantee in respect of the provision of financial assistance by the Bank of England. (5) The Treasury may by order made by statutory instrument provide that a specified activity or transaction, or class of activity or transaction, is to be or is not to be treated as financial assistance for the purposes of subsection SubSection-Paramf.830j-1115496: Para: (a) where the Treasury or the Secretary of State have provided financial assistance to or in respect of P for the purposes of resolving or reducing a threat to the stability of the UK financial system;Yes 1327667809 387000(3)(a), and subsection Single_Level_Xrefmf.830j-1114737Yes 1327667809 387000(4) is subject to this subsection. 72 newlink j043Modification of section gotolink j03570 in relation to Lloyd’s (1) This section applies only if PRA-authorised persons include— (a) the Society, or (b) other persons who carry on regulated activities in relation to anything done at Lloyd’s. (2) Section gotolink j03570 has effect as if— (a) in subsection (1)(a) (and section gotolink j03871(3)), the reference to a PRA-authorised person included a reference to a member of the Society, (b) in subsection (2)(a)(i), the reference to one or more PRA-authorised persons included a reference to the Society, and the members of the Society, taken together, and (c) in subsection (2)(a)(ii), the reference to a PRA-authorised person carrying on the activity of effecting and carrying out contracts of insurance included a reference to— (i) the Society, or (ii) any other person who carries on PRA-regulated activities in relation to anything done at Lloyd’s. (3) In this section— (a) “PRA-regulated activity” is to be read in accordance with section 22A of FSMA 2000, and (b) terms which are defined in Lloyd’s Act 1982 have the same meaning as in that Act. 73 newlink j037Power of Treasury to require FCA or PRA to undertake investigation (1) If the Treasury considers that it is in the public interest that either regulator should undertake an investigation into any relevant events, it may give the

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(1) regulator a direction specifying the relevant events and requiring the regulator to undertake an investigation into those events and the circumstances surrounding them and to report to the Treasury on the result of the investigation. (2) “Relevant events” means events that have occurred in relation to— (a) a collective investment scheme, (b) a person who is, or was at the time of the events, carrying on a regulated activity (whether or not as an authorised person), or (c) listed securities or an issuer of listed securities. (3) “Relevant events” do not include any events occurring before 1 December 2001 (but no such limitation applies to the reference in subsection Single_Level_Xrefmf.730j-1110091: SubSection: (1) If the Treasury considers that it is in the public interest that either regulator should undertake an investigation into any relevant events, it may give the regulator a direction specifying the relevant events and requiring the regulator to undertake anYes 1327667809 387000(1) to surrounding circumstances). 74 newlink j039Conduct of investigation (1) Where a regulator is required by section gotolink j03669 or gotolink j03570 or under section gotolink j03773 to carry out an investigation, it is for the regulator to decide how it is to be carried out, but this is subject to the following provisions. (2) In carrying out such an investigation, the regulator must have regard to the desirability of minimising any adverse effect that the carrying out of the investigation may have on the exercise by the regulator of any of its other functions. (3) The regulator may postpone the start of, or suspend, an investigation if it considers it necessary to do so to avoid a material adverse effect on the exercise by it of any of its other functions. (4) The regulator must notify the Treasury if it postpones the start of, or suspends, an investigation under subsection Single_Level_Xrefmf.930j-1112846: SubSection: (3) The regulator may postpone the atart of an investigation if it considers it necessary to do so to avoid a material adverse effect on the exercise by it of any of its other functions.Yes 1327667809 387000(3), and the notification must specify when the investigation will begin or resume. (5) The Treasury may, by a direction to the regulator, control— (a) the scope of the investigation; (b) the period during which the investigation is to be carried out; (c) the conduct of the investigation; (d) the making of reports. (6) A direction may, in particular— (a) confine the investigation to particular matters; (b) extend the investigation to additional matters; (c) require the regulator to postpone the start of, or suspend, an investigation until a specified time or until a further direction; (d) where a notification has been received under subsection Single_Level_Xrefmf.930j-1112846: SubSection: (3) The regulator may postpone the atart of an investigation if it considers it necessary to do so to avoid a material adverse effect on the exercise by it of any of its other functions.Yes 1327667809 387000(3), require the regulator to begin or resume the investigation immediately or at a specified time; (e) require the regulator to discontinue the investigation or to take only such steps as are specified in the direction; (f) require the regulator to make such interim reports as are so specified. (7) In exercising the power conferred on them by this section, the Treasury must have regard to the desirability of minimising any adverse effect that the

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(7) carrying out of the investigation may have on the exercise by the regulator of any of its other functions. 75 newlink j040Conclusion of investigationOn completion of an investigation required by section gotolink j03669 or gotolink j03570 or under section gotolink j03773, the regulator must make a written report to the Treasury— (a) setting out the result of the investigation, (b) setting out the lessons (if any) that the regulator considers that it should learn from the investigation, and (c) making such recommendations (if any) as the regulator considers appropriate. 76 newlink j039aStatements of policy (1) Each regulator must prepare and issue a statement of its policy with respect to the exercise of its functions under sections gotolink j03669 to gotolink j04075 (“the relevant sections”) and, in particular— (a) the matters it will take into account in determining whether the conditions which give rise to its duty to carry out an investigation under section gotolink j03669 or gotolink j03570 (as the case may be) are met, and (b) how it will carry out investigations under the relevant sections. (2) A regulator may at any time alter or replace a statement issued by it under this section. (3) If a statement issued under this section is altered or replaced by a regulator, the regulator must issue the altered or replaced statement. (4) A regulator must obtain the consent of the Treasury before issuing a statement under this section. (5) A statement issued under this section by a regulator must be published by the regulator in the way appearing to the regulator to be best calculated to bring it to the attention of the public. (6) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section. (7) In exercising, or deciding whether to exercise, its functions under the relevant sections a regulator must have regard to any statement published by it under this section and for the time being in force. (8) A regulator may charge a reasonable fee for providing a person with a copy of a statement issued by it.Publication of reports 77 newlink j042Publication of reports of inquiries and investigations (1) This section applies where a report is made to the Treasury under section gotolink j03367 or gotolink j04075. (2) Subject to subsection Single_Level_Xrefmf.240j-1113198: SubSection: (3) The Treasury may withhold material in the report from publication to such extent\xd1 Yes 1327667809 387000(3), the Treasury must publish the report in full.

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(3) The Treasury may withhold material in the report from publication to such extent— (a) as is required by any statutory provision, enforceable EU obligation or rule of law, or (b) as the Treasury consider to be necessary in the public interest, having regard in particular to the matters mentioned in subsection Single_Level_Xrefmf.240j-1113426: SubSection: (4) Those matters are\xd1 Yes 1327667809 387000(4). (4) Those matters are— (a) the extent to which withholding material might inhibit the allaying of public concern; (b) the risk of harm or damage that could be avoided or reduced by withholding any material; (c) any conditions of confidentiality subject to which any person acquired information that was given to the inquiry or used in the investigation. (5) In subsection SubSection-Paramf.240j-1113451: Para: (b) the risk of harm or damage that could be avoided or reduced by the withholding any material;Yes 1327667809 387000(4)(b) “harm or damage” includes in particular— (a) damage to national security or international relations; (b) damage to the economic interests of the United Kingdom or a part of the United Kingdom; (c) damage caused by disclosure of commercially sensitive information. (6) The Treasury must lay before Parliament whatever is published under subsection Single_Level_Xrefmf.240j-1113276: SubSection: (2) Subject to subsection **, the Treasury must publish the report in full in such manner as they consider appropriate.Yes 1327667809 387000(2). (7) If the Treasury receive a report under section gotolink j03367 or gotolink j04075, but withhold all or part of the material in the report from publication, they must publish and lay before Parliament a statement of their reasons for not publishing the report in full. (8) Publication under subsection Single_Level_Xrefmf.240j-1113276: SubSection: (2) Subject to subsection (3), the Treasury must publish the report in full.Yes 1327667809 402000(2) or Single_Level_Xrefmf.240j-1113824: SubSection: (7) If the Treasury receive a report under section Yes 1327667809 402000(7) is to be in such manner as the Treasury think fit. (9) References to a report under section gotolink j03367 or gotolink j04075 include references to an interim report required under section gotolink j03165 or gotolink j03974.Supplementary 78 newlink j041Interpretation and supplementary provision (1) In this Part—“authorised person” has the same meaning as in FSMA 2000;“collective investment scheme” has the same meaning as in FSMA 2000;“consumer” has the meaning given in section 1G of FSMA 2000;“listed securities” means anything which has been admitted to the official list under Part 6 of FSMA 2000;“PRA-authorised person” has the same meaning as in FSMA 2000;“recognised clearing house” has the same meaning as in FSMA 2000;“recognised investment exchange” has the same meaning as in FSMA 2000;“regulated activity” has the same meaning as in FSMA 2000;“regulator” means the FCA or the PRA. (2) A direction by the Treasury under this Part must be given in writing.

Part 6\rPart 6 — Investigation of complaints against regulatorsInvestigation of complaints against regulators 79 newlink j150Arrangements for the investigation of complaints (1) The regulators must— (a) make arrangements (“the complaints scheme”) for the investigation of complaints arising in connection with the exercise of, or failure to exercise, any of their relevant functions (see section gotolink j15180), and (b) appoint an independent person (“the investigator”) to be responsible for the conduct of investigations in accordance with the complaints scheme. (2) For the purposes of this Part “the regulators” are the FCA, the PRA and the Bank of England, and references to a regulator are to be read accordingly. (3) The complaints scheme must be designed so that, as far as reasonably practicable, complaints are investigated quickly. (4) The Treasury’s approval is required for the appointment or dismissal of the investigator. (5) The terms and conditions on which the investigator is appointed must be such as, in the opinion of the regulators, are reasonably designed to secure— (a) that the investigator will be free at all times to act independently of the regulators, and (b) that complaints will be investigated under the complaints scheme without favouring the regulators. 80 newlink j151Relevant functions in relation to complaints scheme (1) This section has effect for the interpretation of the reference in section gotolink j15079(1)(a) to the relevant functions of the regulators. (2) The relevant functions of the FCA or the PRA are its functions other than its legislative functions. (3) The relevant functions of the Bank of England are its functions under Part 18 of FSMA 2000 (recognised clearing houses) or under Part 5 of the Banking Act 2009 (inter-bank payment systems), other than its legislative functions. (4) For the purposes of subsection Single_Level_Xrefmf.151j-1112586: SubSection: (2) The relevant functions of the FCA or the PRA are its functions other than its legisative functions.Yes 1327667809 402000(2), the following are the FCA’s legislative functions— (a) making rules under FSMA 2000; (b) issuing codes under section 64 or 119 of FSMA 2000; (c) issuing statements under— (i) section 63C, 64, 69, 88C, 89S, 93, 124, 131J, 138N, 192H, 192N, 210, 312J or 345D of FSMA 2000, or (ii) section gotolink j039a76 of the Financial Services Act 2012; (d) giving directions under section 316, 318 or 328 of FSMA 2000; (e) issuing general guidance, as defined in section 139B(5) of FSMA 2000. (5) For the purposes of subsection Single_Level_Xrefmf.151j-1112586: SubSection: (2) The relevant functions of the FCA or the PRA are its functions other than its legisative functions.Yes 1327667809 402000(2), the following are the PRA’s legislative functions—